The High Life of SAA's boss

[Gunship]

:ugh: Here we go again ... so SAffer PPRUNERS are not the only one's negative of " their" own airline. :yuk:
KHAYA Ngqula was deployed at SAA to trim the embattled airline’s expenditure — but the man dubbed “Mr Fix-It” has been running up bills flying to meetings by private helicopter.

The Sunday Times has established that between December last year and March 2005, the CEO made 15 trips by helicopter to meetings in Gauteng within driving distance of each other, at a cost of R350 000.

Shortly after Ngqula’s appointment in October last year, the airline embarked on a massive cost-cutting programme that included slashing the coffee budget for staff at its head office in Kempton Park.

But in only eight months in the job, Ngqula — whose perks include a 745 BMW, a bodyguard and a personal chauffeur — has cost taxpayers more than R500 000 in helicopter trips, the chartering of an airplane for a 30-minute flight between France and England and exorbitant bills at London’s exclusive The Dorchester hotel.

His own benefits are clearly not part of his plan to save the airline a massive R1.6-billion over 18 months as he has promised.

Yesterday, SAA spokesman Onkgopotse Tabane confirmed the helicopter trips, but said the airline was “not prepared to provide piecemeal financial details via the media”.

While the airline, which posted a net loss of R8-billion last year, yesterday justified Ngqula’s expenses as normal business practice, the South African Transport and Allied Workers Union slated the extravagance.

Spokesman Ronnie Mamba said the union would immediately launch an investigation into the helicopter jaunts. Coming at a time when the airline boss was advertising cost-cutting, they raised serious questions about Ngqula’s integrity, he said.

“We condemn any irresponsible use of public resources,” Mamba said.

In February, Ngqula — who headed the Industrial Development Corporation parastatal before joining SAA — conceded that his management team was the airline’s biggest cost. Severance packages were offered to cut the “excess fat”.

“In the past, no one has ever told us to make a profit; we have always known that we have a shareholder with a deep pocket, but the buck stops here,” Ngqula said in the in-house magazine, mysaa.

But in the same month, the airline signed a contract with a private company for executive travel.

It yesterday confirmed signing a long-term contract with Henley Air and said that R400 000 had been made available for this.

The Sunday Times is in possession of invoices from the aviation company for two Bell helicopters used for more than 15 journeys undertaken by Ngqula over three months. He has also flown on the company’s :yuk:ultra-modern Bell 206B JetRanger helicopter which is usually leased for around R4 350 an hour. :yuk:

On February 28, Ngqula, who has a holiday home in the south of France, chartered a plane from Toulouse to London.

SAA paid French company Dassault Falcon Service more than R100 000 for the brief journey and justified this as being in the “normal course of Ngqula’s duties between the two cities”.

The flight would have cost R3 288 on Air France if it had been booked via SAA in Johannesburg.

Tabane, when asked for details of meetings and schedules which might necessitate Ngqula travelling by helicopter, said: “We are not in the business of disclosing the details of the CEO’s diary to the press.”

He said the helicopters allowed Ngqula to plan “back-to-back” meetings and had been made a permanent feature of his position to assist in his “rapid style of delivery”.

Tabane said the Bambanani profit-improvement plan was on track, as SAA’s results would show.

“Finally, we have to spend money to make money or save money,” he said. “We are in a billion-dollar industry and we cannot afford to play small, lest we are squeezed out of the market.”

He confirmed that Ngqula had stayed at The Dorchester — which has hosted US President George Bush — in November last year and again in March, while attending a business meeting. While Ngqula’s staff at Airways Park no longer drink top-brand coffee, he spent £1550 on a two-night stay in March, including breakfast at over R400.

www.sundaytimes.co.za

[I.R.PIRATE]

Ok now wait just ONE minute here. When are we going to stop acting surprised when it it is revealed that yet another previoulsy disadvantaged figure-head, is actually only after self enrichment and pocket padding while hiding behind the facade of aid/budgeting/caring/running companies/running countries. They care about 1 thing only, how much they can stuff into their expensive suit pockets. I am sure you have all seen how they capture primates by making a small hole in something and and putting something sweet inside. When said primate comes along and " investigates" said hole, and finds said sweets inside, he will put his hand inside to take the sweets. However....to remove his hand from said hole, he would have to let go of the sweets....eish...dilemma.

[Gunship]

IRP - to me is not acting so surprised - it is "What is SAA / their commitee's / Unions doing about it."

We have SAA pilot's on here. Do not tell me they are too slapgat just to let this go on and on ..

Why is the taxpayers not doing something about it ? This made Sunday Times headlines - why ?

Are we really such a gullable nation as everyone says ? Looks like it :*

[Solid Rust Twotter]

So nothing's changed, then....:yuk:

Guns, each time anyone says anything negative about SAA on this forum, the okes come out of the woodwork and try to justify the crap by pointing out the obvious fact that the taxpayer has bought pretty new aircraft and sims. Those airlines who have to stand on their own feet are derided.

The taxpayer can do nothing about it as govt ignores those who pay their salaries and continues to put self enriching cronies into positions of power. This high handedness is nothing new and just reflects the mindset that they can do anything they want. Unfortunately, that mindset has filtered down to the national carrier as well...:(

[Gunship]

Well I do not pay tax .. do you ? :suspect:

[Solid Rust Twotter]

Guns

The ratio of taxpayers/ruling party supporters is skewed against the taxpayer so no one is holding the govt to account for their ineptitude in these things by voting them out of power.

[Gunship]

Ok but what about the SAA Unions ... are they just too slapgat to do anything or the old sindrome of "Laat God's water oor God's Akkers" ? In other words - just let live and go as long as I get my pension and all the extra fittings ... :E ????

[Solid Rust Twotter]

As long as SAA is funded by the taxpayer, this will continue. The crew union isn't too impressed either by all accounts, but this is an issue that management needs to address. The constant stream of politically appointed self enriching big cheeses parading through SAA at taxpayers expense does nothing to inspire confidence. The taxpayer is nothing but a source of funds without accountability to these individuals.:rolleyes: :mad:

To really level the playing field, don't tax the opposition to bring them into line with the funding SAA recieves from govt. The extra funds available would allow them to show even better profits, allowing them to improve their operation to deliver even better service.

Why can't SAA management do the same with all the help and funding they're getting?:confused:

Is it an African thing to reward mediocrity or is this a worldwide phenomenon?:rolleyes: :hmm:

[Beta Light]

Fluffy fan must be bitting his lip.....

[oneeyed]

Looks like RSA and SAA have finally arrived in Africa.

Well don o

[skyvan]

How do the newspapers get all this info? Surely all the employees are fully behind the boss wasting all this money to jet around, and surely they would not let the newspapers know about such blatant gravy-training!

Of course the unions are doing something about it. When challenged about this waste of resources, KN nearly bit off the head of the senior pilot who asked him, and then blamed the pilots for all the ills of the company. If you cannot discuss something with the man openly, then you allow the press a bit of "freedom".

Maybe he will have to answer to Ms Ramos, who uses SAA for nearly all her airtravel needs. I am sure that she will be asking some questions tomorrow.

[forssi]

Now why do we all act so surprised when something like this happens?!:confused:

[jbayfan]

Most SAA employees knew about the helicopter trips before this article. However, what the employees do not know is what is written into Khaya's contract, and he may well be in his legal and contractual (but not ethical) right in using that service. He was a very wealthy man before being appointed to SAA, and probably used helicopters for business travel at the IDC and other companies he was involved with. I know of a case where the IDC's Cessna Citation V was being wet-leased by Rossair Charter to Billiton for a charter to Maputo. When Khaya arrived at Maputo Airport for an SAA flight back to Johannesburg, he saw the Citation and commandeered a seat back to Johannesburg, to the disgust of Billiton and Rossair. However, although Khaya knows very little about the airline business, he has been sensible enough to appoint a COO, Kyrl Acton, who will hopefully be able to streamline the business. At least Khaya had the balls to get to the bottom of the bloated management structure at SAA and start reducing these numbers where the manager to employee ratio was 4:1 when he arrived. The only worry is that the managers that have left are those that were the most efficient and knowledgable!! What most outsiders do not realise is that SAA is extremely profitable from an operational standpoint. All losses stem from poor corporate governance in the form of hedging losses as a result of a lack of risk management by the former management aka. Viljoen, Van Jaarsveld and Forson. With all Khaya's excesses and his bombastic nature, I say that we give him a chance because it will be very difficult to throw a million Rands worth of personal extravagance in his face if he manages to save the airline his targeted R1.6 billion within the time frame he has set himself. However, he should be taken to task if saving the R1.6 billion leads to SAA contracting instead of expanding, lower service levels (they can't get much worse than they are now), poor staff morale and short term profitability initiatives which will lead to long term unprofitability!!

[Gunship]

:ok: Jbayfan you have touched quite an few points that is highlighted in this news that appeared on IOL just now :ok:

South African Airways has appointed a new team of executives to help it make a financial turnaround, the company's head said on Sunday amid allegations that he had used his position to fund a lavish lifestyle.

Khaya Ngqula, SAA's chief executive and president, said the board had been appointed after months of thorough investigation "to help drive the company's turnaround strategy".

"This new organisational top structure is part of the process that we began last year when we realigned structures at SAA to increase efficiency and remove duplication," Ngqula said in a statement.

Ngqula's appointments included Nomfanelo Magwentshu as the general manager business development and Kyrl Acton as the chief operations officer.

One of Magwentshu's responsibilities will be overseeing SAA's expansion into Africa.

Acton has been tasked with driving commercial tasks, such as developing the company's fleet of aeroplanes.

Ngqula said SAA chief financial officer Tryphosa Ramano had taken over the co-ordination of the company's profit improvement programme.

The company's chief risk officer, Dan Moeti, had been tasked with setting up a risk management strategy for SAA.

"We have now adopted job titles that speak to people's responsibilities," Ngqula said.

"All these changes will go a long way in consolidating the good work you all are already doing in making the turn around strategy bear fruit."

SAA company posted pre-tax loss of R8.7-billion in 2004. It has been reported that more than R10-billion had to be injected into SAA by its parent company, Transnet.

Ngqula's announcement came on the same day that the Sunday Times newspaper published an article headlined: "The high life of SAA's big chief".

The article alleged that between December last year and March 2005, Ngqula made 15 trips by helicopter in Gauteng to meetings within driving distance of each other at a cost of R350 000.

"The Sunday Times is in possession of invoices from the aviation company for two Bell helicopters used for more than 15 journeys undertaken by Ngqula over three months," the article said.

After only eight months in the job Ngqula "has cost taxpayers more than R500 000 in helicopter trips, the chartering of an airplane for a 30-minute flight between France and England and exorbitant bills at London’s exclusive The Dorchester hotel," the article said.

Ngqula's perks at SAA included a BMW 745, a bodyguard and a personal chauffeur, the Sunday Times said.

The newspaper said that shortly after Ngqula’s appointment in October last year, the airline embarked on a massive cost-cutting programme that included slashing the coffee budget for staff at its head office in Kempton Park.

Ngqula did not comment on the allegations.

The SAA statement said, however, that cutting costs would be one of SAA's main objectives.

It said one of the key structures that the organisation was based on was the "introduction of a culture of excellence with profit and cost control as the main objective". - Sapa

[Parrot]

Get some perspective here...
I agree that its a bad idea wasting taxpayers money and I am always ready to have a winge ... BUT

We are in the aviation world ...and we have been telling everyone that the most efficient way to get around for top execs is by business jet and/or helicopter ... and now that someone actually does it ... we start complaining ...

Perhaps we should be asking why SAA does not have a couple of their own helicopters ... it might just get some of the wingers a job.

[Beta Light]

If it was a profitable corporation / organization we would not have a problem Parrot. But if it is a loss making, tax payers, incompetant outfit it is not exceptable.

[jbayfan]

Beta Light, PLEEEEZ read my previous post. In it I explain that SAA is operationally very profitable. The huge losses are as a result of massive hedging losses due to poor corporate governance and the lack of a risk management strategy by the previous SAA executive management. However, all decisions of this nature have to be approved by the SAA board, and it is this board with its demographically representative bunch of governement appointed incompetents who should be taken to task for these non-operational losses. Therefore, if government insists on window dressing the SAA board, then government should carry the can when the sh:mad: hits the fan.

[Solid Rust Twotter]

Of course government carries the can...



...With taxpayers money!:*

[jbayfan]

It's your government and your government's airline so yes, they should carry the can. You are, of course, an indirect shareholder!!:ok:

[Solid Rust Twotter]

Logically, one would fire the board for performance like that.

However, in the Free Peoples Workers Democratic Paradise of Azania....:rolleyes:

[fluffyfan]

If You guys noticed I mentioned the fact that the big boss was flying around in helocopters a few months ago..........

Gunns..........what can we as white pilots do? what ever we do we are the racisit pigs................I personally thing SAAPA might have something to do with the article in the Sunday times....so we are doing something...........loved your comment about "Im not paying tax"..........you lucky bugger.....

[Solid Rust Twotter]

Old story, Fluffy.

The crews are getting it right at the sharp end, but the hangers on and other assorted parasites are undoing any good work you guys are accomplishing.:(

It's not going to change until they quit seeing the taxpayer as a convenient bail out for their incompetence and greed.

[AfricanSkies]

Solid Rust Twotter - - ‘The ratio of taxpayers/ruling party supporters is skewed against the taxpayer so no one is holding the govt to account for their ineptitude in these things by voting them out of power.’ – an excellently concise and accurate description.

Jbayfan – so as a shareholder in SAA (ie. a taxpayer) how about me being entitled to reduced fares or an upgrade if a seat is available?

Has there been any government response to the article?

[Solid Rust Twotter]

AS

Apart from refusing to respond, denials and backpedalling?

Ermmmmm......

[fluffyfan]

Solid Rust........True Story......:mad:

But its there country now..................lets hope we dont go the Zimbabwe route.

Did you know it took Germany and Japan approx 25 years to go from devastated completely destroyed nothing left countries to being world economic superpowers.....

It took Zimbabwe 22 years to go from a wonderful self sufficient paradise..........to Hell................Well done Bob, you must be proud.....

Maybe I am lying maybe I am a racist colonial pig......

[south coast]

simple...

like what most countries have done...privatise their national carrier, allow the government a max 49% share option to help out in times such as sept 11, but otherwise let people who are professional business and money makers run a potentialy successful company.

[Solid Rust Twotter]

Don't think it's racial at all. There are just as many white plonkers as black. An ex finance minister with a string of failed businesses springs to mind.

Unfortunately the nepotism and cronyism displayed by the current lot is nothing new, but one would have thought they'd learnt something from the past. It would seem that all politicians and their hangers on are nothing more than thieves and a drain on the taxpayer. When a competent manager is appointed, rather than a political favourite, and skin colour is overlooked, perhaps we would be on the road to recovery for SAA.

Until that happens, the taxpayer will continue to bear the cost of arrogant political stupidity... :yuk: :yuk:

You may have realised, by now, that there is nothing more despicable and self serving on the planet than a politician, IMO. They cause more trouble than they're worth, gibber, froth, drool.....:mad: :mad: :mad:

[jbayfan]

Jbayfan – so as a shareholder in SAA (ie. a taxpayer) how about me being entitled to reduced fares or an upgrade if a seat is available? AS, if you buy shares in Telkom do you get discounts on your phone bill? NO!! But if Telkom starts to lose money and your shares decrease in value then you are effectively paying for those losses.

The only difference is that you have a choice as to which shares to buy. If you choose not to fly SAA and support one of the other carriers then that is your democratic option and about all you can do.

However, I recently booked a flight for a friend between PE and Joburg. She wanted to fly on 1Time as I told her that would be the least expensive option. However, 1Time was full on her outbound date and so the natural (or so I thought) next step was to check out Kulula.com. Price R938 all inclusive roundtrip. For interests sake I went into flysaa.com and lo and behold R935 all inclusive and plenty of flights to choose from.

There was more to be read from this than just the fare being lower than Kulula. When reserving a seat online, I noticed that both the B738 and the A319 were all economy on every flight. i.e. NO MORE BUSINESS CLASS ON THIS ROUTE!! And there are two options for booking flights, the first with Voyager miles and the second without, the lower fare obviously being applicable to the "without" option.

Is SAA slowly introducing an LCC model into their domestic network??

[Deskjocky]

Jaybayfan,

Its a good point you raise- SAA is a network carrier and does not have the cost structure that will allow it to transform itself into a LLC. Then again it doesnt have to!
The mistake the other carriers overseas made was that they tried to compete with the LLC's head on and created off shoots- eg BA and GO and BMI with BMIbaby etc etc. There is only one problem- LLC's offer the fares they do becuase it costs them much less to get the aircraft ready to operate on the ramp- so a slick paint job and a new brand doesnt reduce your legacy costs- hence the failure of Go.

So how does a network carrier complete with a 1Time who have a very small cost base - use the one thing you have and they dont- frequency and route network- the cornerstone of the network carrier.
Standard revenue management priciples dicate that you sell the peak flights for more and the off peak flights for less- or so its worked for years- even 1Time and Kulula follow this principle, check it out: are all the flight priced at rock bottom? no way hoze!!
There is a reason why 1Time recruited BA/Comairs' head of revenue mangement. They are very good at telling you they are the cheapest but are they always?? Anyway back to the point, assume that the network carrier operates 24 return flights a day on a particular route, say 10 of these flights fall into the peak catagory and the other 14 fall into the off peak catagory. You have to operate the off peak flights to maintian the reqired frequency for connecting traffic/ code share commitments, as well as for your corporate customer who wants flexibilty (for which he has paid a higher fare) but the load factor is releatively low so the door is open to sell this "distressed" inventory off at levels that will essentially just cover the variable cost you incur in servicing the additional customers you get. On the issue of variable costs- food is not a huge one of these- despite what the LLC's say about it. Make enough zarmies in your kitchen and you can get the price down to almost nothing!

Sorry off the point again, the network carrier also does not have to sell the inventory off for less than the LLC, all they have to do is be in the same price range. The lack of frequncy of the LLC does the rest- once they sell off their ultra cheap seats, the customer will then shop around looking for a deal and the network carrier is in business! Remebering the LLC cannot afford to sell all its tickets off at the lowest price, revenue management principles apply!

The net result is that in order for the LLC to remain competitive, they open up more cheap seats than they would like to and that surpresses their average fare which reduces revenue, which hurts the one thing that will counter the network carrier- expansion.

So as long as SAA has off peak flights they will have an effective counter- no slick paintjobs, no new brands and lots of free booze and zarmies!

[BAKELA]

I've just spent 30 minutes reading through this thread and came to a two word summary...SAA sucks!

[Gunship]

Strange that Black Pilot made no comments here ... obviously agrees with his bosse's antics :E

[BAKELA]

Guns, from 4HP on another threadAnd in the same vein "Black Pilot" has had his privileges removed. Self explanatory I reckon.